Job Cuts Announced By Amazon: Corporate And Technology Jobs Are Targeted

why is amazon laying off workers

According to the New York Times’ Monday claim, which was based on unnamed persons with knowledge of the situation, Amazon intends to fire 10,000 workers from business and technology positions.

The article claims that the job layoffs, which could begin as soon as this week, will most likely affect employees who work on Amazon products (like its voice-assistant Alexa) as well as those in its retail and human resources divisions. The report indicated that “the total number of layoffs remains variable.”

Amazon would be the latest internet company to announce big layoffs in recent weeks, amid economic uncertainty and a precipitous dip in demand that many software titans encountered during the pandemic and prompted them to quickly expand workers. Meta, Facebook’s parent company, announced 11,000 layoffs last week.

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What Is The Reason For The Downfall?

Online Shopping App Amazon downfall

The decline in demand as the world recovers from the Covid-19 outbreak is the primary cause. The pandemic-related lockdowns, which kept people indoors and caused them to make more online purchases, spend more time on social media, watch more streaming material, and play more multiplayer games, are almost done.

The number of tech companies that had been expanding rapidly for the previous few years and had employed to meet the rising demand began to reflect this. Crypto’s Lehman Brothers moment and what occurs following FTX’s demise are only available to subscribers.

Engagement and income across platforms are declining as people return to their offices and rediscover the great outdoors. Less employees are required to manage these platforms as a result.

Companies who initially believed that the pandemic bump would be sustained by altered user behaviour are now realising that this is not the case.

The situation is made worse by signs that a worldwide recession is imminent and is already affecting demand for non-essential goods in several countries. A purchase that can be delayed is frequently delayed.

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Amazon To Lay Off 10,000 Workers

Amazon is planning to lay off some 10,000 employees in corporate and technology jobs

According to a person familiar with the firm, Amazon.com Inc (AMZN.O) still planned to eliminate about 10,000 jobs, including those in its retail division and human resources, on Wednesday. The company stated some employees in its devices section have been let go.

The announcement, Amazon’s first since media sources like Reuters published its layoff intentions on Monday, signified a remarkable turn for a firm famed for its job creation and gave more context to the most recent layoffs plaguing the technology sector.

The business opted to merge teams in its devices division, which popularised speakers that users can control with their voice, according to Amazon CEO Dave Limp in a blog post. The workers who were laid off on Tuesday were informed.

“We continue to face an unusual and uncertain macroeconomic environment,” he said. We’ve been working over the past few months to further prioritise what matters most to our customers and the business in light of this.

The Times reports that the layoffs will have an effect on Amazon’s Alexa business as well as the company’s retail and human resources divisions. The Wall Street Journal reports, citing internal documents it reviewed, that Amazon’s Alexa group, which creates the Echo hardware and related software, suffers losses of up to $5 billion annually.

The 10,000 jobs represent about 1% of Amazon’s 1.5 million global employees. According to The Times, the precise number of anticipated layoffs may change before they are publicized. On November 3, Amazon declared a hiring moratorium.

Due to slower retail sales than it experienced at the height of the pandemic, Amazon has been having trouble in recent quarters. The business invested enormous sums of money in constructing warehouses and expanding its fulfilment network, which resulted in the hiring of tens of thousands of workers.

The cuts would be the largest in the company’s history

The world’s largest online retailer has been attempting to reduce the size of its network of warehouses and rent out individual spaces within the buildings. Along with Amazon Care, the company has terminated other services.

Amazon reported mediocre earnings in October, missing analysts’ revenue forecasts and providing less optimistic fourth quarter guidance than expected. Amazon stock has decreased 40% so far this year.

Amazon has now joined the growing list of tech firms that have either frozen hiring or implemented layoffs. In response to a drop in ad sales, social media giant Meta fired 11,000 employees just last week, and Twitter fired 3,700 after Elon Musk, the billionaire CEO of Tesla, took over. Lyft fired 683 employees, while Snap let go 20% of its workforce.

The goal of Amazon’s Alexa division is to persuade customers to subscribe to the company’s Prime services. The voice assistant can be used with Amazon’s Echo, Echo Dot, Echo Show, and numerous home automation products.

The company has been investing heavily in the project for years, creating a slew of new technology including Alexa-compatible security cameras to smart glasses that let you access Alexa, make calls, and listen to music.

However, as customers cut back on spending or return to physical stores, e-commerce sales are plummeting, forcing Amazon to restructure its operations and increase profitability.

Companies Announcing Layoffs

Who else has made such an announcement?

When specific roles were found to be no longer necessary, according to Amazon, it attempted to assist employees in finding alternative positions.

For the first nine months of this year, Amazon has recorded net losses totalling $3 billion, compared to net income of nearly $33 billion in 2021 and $21 billion in 2020.

Under Mr. Bezos, Amazon last experienced a significant profitability push in 2017. According to senior Amazon officials, Mr. Jassy’s review is significantly longer. Since taking CEO last year, Mr. Jassy has made difficult decisions while keeping an eye on the bottom line.

The parent company of Facebook, Meta, has made the most dramatic cuts. It appears that decreased engagement on its platforms and ad tracking regulations, which have affected the efficacy of campaigns on those platforms, have had an influence on Meta’s performance.

Over 11,000 employees were laid off by Meta last week. The pruning that has been more obvious, though, has occurred at Twitter after Elon Musk took control of the microblogging service.

He asserts that the firings are necessary to rationalize the platform’s business strategy. Although Apple hasn’t announced any layoffs, it is reducing employment due to a decline in demand for both its goods and services.

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Sheetal

I'm a 4th Year student of Architecture Undergraduate programme at Priyadarshini Institute of Architecture And Design Studies, Nagpur. During my studies, I have worked on multiple projects and these assignments have helped me to become a great team player and how to function well in fast paced and deadline driven environments. Some of interests are Sketching, listening and exploring old music, watching documentaries and being an architectural student I like to explore the conceptual angle of every element.

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